India’s top home loan lenders have decided to offer lower interest rates to new customers.
State Bank of India (SBI) and Housing Development Finance Corp (HDFC) have come up with special home loan offers a day after the central bank refrained from hiking rates.
“The interest rate on our home loans has been reduced significantly and a separate interest rate structure has been rolled out for women borrowers,” SBI said in a statement.
The bank is giving home loans of up to Rs 75 lakh at 10.1% for women and 10.15% for other new borrowers. Loans above Rs 75 lakh will be at interest rate of 10.25% for women and 10.3% for others. SBI has raised the slab for lower interest from Rs 30 lakh to Rs 75 lakh.
HDFC, the largest housing finance company, will give new home loans of up to Rs 75 lakh at 10.25% provided the loan application is submitted before January 31 and the first disbursement is taken by February 28, 2014. This would be under special “Winter Bonanza.”
ICICI Bank, which is another big home loan player, is yet to take a call. However, according to sources, the private sector lender may revise interest rates on home loans from January 2014.
The bank is also planning to withdraw its “1% cashback” offer that has been running since more than a year. ICICI Bank officials could not be contacted for a comment.
Typically, banks offer special rates on home loans to boost credit growth during the third and fourth quarters of every financial year. “It is a different scenario this year, banks are not following a particular trend but are taking decisions depending upon their liquidity conditions,” said Sukanya Kumar, founder and director of the portal—RetailLending.com.
In September, the RBI had unexpectedly increased policy rate by 25 basis points which was followed by another hike of 25 basis points in October. In reaction, SBI had increased its base rate 20 basis points from 9.8% to 10% in November. HDFC had also hiked its home loan rates for new and existing borrowers by 10 basis points earlier this month.
“The new home loan offers may be an attempt to make up for the fall in home loan demand after rates were increased,” said Harsh Roongta, CEO of portal Apnapaisa.com.